Calgary Chamber responds to 'What we Heard' report on the proposed Clean Electricity Regulations

Alberta businesses acknowledge climate change as one of the most pressing issues facing Canada – and the world – today. Across sectors, companies are working to decarbonize and make investments that support emissions reduction initiatives, ensuring Canada is a leading jurisdiction for investment. Since 2005, emissions have decreased 56 per cent in Canada’s electricity sector, and if provided with adequate and additional supports, streamlined policy and realistic timelines, initiatives like Carbon Capture and Storage (CCS) will continue to lower emissions. Ensuring policy acts as a catalyst for investment, not a deterrent, is critical to achieving our shared climate goals.

Upon reviewing Environment and Climate Change Canada’s (ECCC) February 16, 2024 ‘What We Heard’ report, we acknowledge and appreciate the government’s commitment to continued engagement with businesses to ensure policy balances the need to decarbonize, with the need to provide reliable and affordable electricity. The report reflects this balance, and the concerns previously raised by the Calgary Chamber of Commerce in our November 2, 2023 submission to ECCC, which contends that as drafted, the CER would have significant social and economic consequences by detrimentally impacting the reliability of the grid and affordability of electricity in Alberta. The Chamber’s submission included several recommendations to mitigate the negative economic and social impacts of the CER, which we are pleased to see reflected in the ‘What We Heard’ report.

As the government continues its engagement, we strongly encourage the implementation of the proposed changes to the CER to ensure electricity remains reliable and affordable. To support this work, we’ve provided recommendations on several changes under consideration by ECCC.

Recommendations

Engagement Process

The CER would have broad impacts across the economy as industries seek to reduce their emissions while continuing to deliver services to Canadians. With the possibility of significant revisions illustrated by the depth and range of changes currently under consideration, an additional update prior to Canada Gazette II will provide much needed certainty and stability, minimizing the impact of policy changes to the consumer.

We recommend the Government of Canada:

Release an updated draft CER with new changes to Canada Gazette I – or, at a minimum, release an additional public update with newly proposed changes allowing stakeholders to review the updated regulatory requirements prior to publishing the CER Canada Gazette II.
Update the Regulatory Impact Analysis Statement (RIAS) accordingly to provide transparency regarding potential costs and benefits of the revised approach.

This recommendation is aligned with Section 3.3.7.1.1 of the Treasury Board Secretariat’s 2024 Guide to Regulatory Development and RIAS Writing, which states:

“[I]n some cases, comments received as a result of pre-publication may alert regulatory organizations to considerations that did not initially factor into the cost-benefit analysis for the proposed regulatory measure. This may result in a substantial change to the regulatory proposal. In these circumstances, it may be necessary to pre-publish for a second time before proceeding to the Canada Gazette, Part II.”

Performance standard and CCS flexibility

Considering the size and scale of the public and private investment required for the adoption of abatement technologies, such as CCS, regulations must not be so prescriptive that they create unintended consequences or excessive risk for long-cycle investment. As it stands, the emissions intensity limits are too stringent and should be adjusted to respond to more realistic and known capabilities of CCS technologies at this time.